Crowdfunding allows founders of for-profit, artistic, and cultural ventures to fund their efforts by drawing on relatively small contributions from a relatively large number of individuals using the internet, without standard financial intermediaries. Drawing on a dataset of over 48,500 projects with combined funding over $237M, this paper offers a description of the underlying dynamics of success and failure among crowdfunded ventures. It suggests that personal networks and underlying project quality are associated with the success of crowdfunding efforts, and that geography is related to both the type of projects proposed and successful fundraising. Finally, I find that the vast majority of founders seem to fulfill their obligations to funders, but that over 75% deliver products later than expected, with the degree of delay predicted by the level and amount of funding a project receives. These results offer insight into the emerging phenomenon of crowdfunding, and also shed light more generally on the ways that the actions of founders may affect their ability to receive entrepreneurial financing.

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The Dynamics of Crowdfunding: Determinants of Success and Failure

This chapter begins by reviewing some of the principles. Building on these, the chapter then discusses how social structures and social networks can affect economic outcomes like hiring, price, productivity, and innovation. It focuses on Sociologists have developed core principles about the interactions of social structure, information, ability to punish or reward, and trust that frequently recur in their analyses of political, economic, and other institutions. Thus, network structure can be partially endogenized in labor market analysis. However, there are also a range of alternatives, not commonly included in economic analysis, that work through social groups and create compliance in less intrusive ways. Many studies, comprehensively reviewed in Roger Myersons, show the powerful impact of social structure and networks on the extent and source of innovation and its diffusion. When people trade with others they know, the impact of knowing each other on the price varies with their relationship, the cost of shifting to different partners, and the market situation.

https://pubs.aeaweb.org/doi/pdfplus/10.1257/0895330053147958

The Impact of Social Structure on Economic Outcomes

Open Innovation: The New Imperative for Creating and Profiting from Technology

The Study of Man. By Michael Polanyi. Price, $1.75. Pp. 102. University of Chicago Press, 5750 Ellis Ave., Chicago 37, 1959. One subtitle to Polanyi's challenging and fascinating book might be The Evolution and Natural History of Error , for Polanyi is at pains to expunge what he believes to be the false notion contained in the contemporary view of science which treats it as an object and basically impersonal discipline. According to Polanyi not only is this a radical and important error, but it is harmful to the objectives of science itself. Another subtitle could be Farewell to Detachment , for in place of cold objectivity he develops the idea that science is necessarily intensely personal. It is a human endeavor and human point of view which cannot be divorced from nor uprooted out of the human matrix from which it arises and in which it works. For a good while

Personal Knowledge: Towards a Post-Critical Philosophy

What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields (Chinese Translation)

We still poorly understand why Silicon Valley has originated so many breakthrough innovations and large companies. The durability of Silicon Valley's innovative competence over the last seventy years also needs more explanation. The failure of several policy-makers around the world to reproduce the Silicon Valley cluster reveals the misunderstanding of the innovative dynamic in Silicon Valley. This study uses complex network theory – CNT (Barabasi, Newman & Watts, 2006; Jen, 2006; Thompson, 2004a) to analyse the complex innovative capability of Silicon Valley and to understand the heterogeneity of agents and the multiplexity of ties that support creation and development of high-tech start-ups. As proposed by Barabasi (2002, p. 200), we view the economy as a complex network, whose nodes are companies and whose links represent the various economic and financial ties connecting them. Innovation and entrepreneurship are understood as resulting from the interactions of numerous economic agents. In a s...

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The role of venture capital firms in Silicon Valley's complex innovation network

When a bank grants a loan, it takes the risk that the borrower will not honor his debt. To reduce this uncertainty, banks have created instrumental evaluation methods in order to try to evaluate the risk more objectively. An analysis of financial counselors’ practices shows the limits of these methods. To obtain information needed for the financial risk evaluation and to reduce the information asymmetry between bankers and borrowers, financial counselors integrate social networks to establish bonds of trust and to accumulate social capital. The quality of the social bond determines the quality of the gathered information and therefore the quality of the risk evaluation. Bank management is aware of the limits of instrumental methods and the importance of social risk evaluation. To improve their economic efficiency, they modify their work organization and their management practices so as to facilitate the emergence of a bond of trust and the accumulation of social capital by their financial counselors. The analysis of economic actors’ speech and behavior involved in activities of credit shows that behind the claimed altruism nature of the trust relationship exists an economic rationality whose social and temporal horizons of optimization differ from the model of the trade exchange seen in conventional economic theory.

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Trust and social capital in the regulation of lending activities

https://archive-ouverte.unige.ch/unige:55443/ATTACHMENT01

Specialized organizations and ambidextrous clusters in the open innovation paradigm

Using the analysis of the social networks that underlie the industrial networks of Silicon Valley, this article demonstrates that due to the nature of exchanged goods and the degree of interdependence between the economic actors, gift exchange is the principle rule of exchange in these networks. The principles of "gift exchange" govern the exchange of information among venture capitalists, lawyers, entrepreneurs, corporate managers, journalists and academics.

/pdf/the-gift-exchange-in-the-social-networks-of-silicon-valley-i5vlgzej71.pdf

The Gift Exchange in the Social Networks of Silicon Valley

This study supports the idea that fields form around issues, and describes the roles of various stakeholders in the structuring, shaping, and legitimating of the emerging field of Corporate Social Responsibility (CSR). A model of the institutional history of the CSR field is outlined, of which a key stage is the appearance of CSR rating agencies as the significant players and Institutional Entrepreneurs of the field. We show to which extent the creation and further development of CSR rating agencies, and the activism of other significant stakeholders of the field (typically portrayed as “standard setters” and “regulatory agents”), contribute to the institutionalization of CSR. With this in mind, among various stakeholders that legitimate the field of CSR, we present the efforts of global and local stakeholders such as the European Union, the United Nations, the International Organization for Standardization, and governments and their interactions. We suggest that the different paths of CSR development and institutionalization in France and in the United States depend on the nature of local and global stakeholders’ involvement in this process and their interactions.

/pdf/dynamics-of-stakeholders-implications-in-the-1ow7whx4ja.pdf

Michel Ferrary

Papers

The role of venture capital firms in Silicon Valley's complex innovation network

Trust and social capital in the regulation of lending activities

Specialized organizations and ambidextrous clusters in the open innovation paradigm

The Gift Exchange in the Social Networks of Silicon Valley

Dynamics of Stakeholders’ Implications in the Institutionalization of the CSR Field in France and in the United States